“New School” vs. “Old School” Equipment Finance

Borrower-focused lending supports the American Dream for all small business owners

Funding the “American Dream” of building a business from the ground up is a struggle faced by millions of entrepreneurs. Financing equipment is a key piece of the puzzle for many, but only 3.7 million of the 36 million businesses in the U.S. that need equipment can get bank financing. For entrepreneurs who do not speak English, the search for financing can be even more daunting.

Hyo Jin Kim worked for most of his life as a meat department manager in Korean supermarkets across California. Confident in his skills and passionate about his craft, Kim decided to open a meat market of his own. Kim and his wife, Hye Jeong Cho recruited their daughter as a translator, and found a lender willing to finance the refrigerators, freezers, slicers and work benches necessary to open up shop. When the lender required that Kim and Cho agree to the loan terms themselves in English, plans for the meat market came to a halt.

A Borrower-Focused Experience
Upon hearing about Kim and Cho’s “old school” experience with the previous lender, LeaseQ, an equipment financing marketplace, enlisted one of its lender partners, Financial Pacific Leasing for the deal. Financial Pacific jumped at the opportunity to turn the couple’s American Dream into a reality.

“In situations where our customer doesn’t speak English or is more comfortable speaking a different language, we utilize the services of a translator,” said Terey Jennings, executive vice president of Financial Pacific. “When we communicate with the translator, we can be assured they have a thorough understanding of the financing contract.”

“We recognize each lender in the market abides by different policies. Our thought process was looking for a way to solve the problem,” Jennings continued.

With the language barrier dismantled and equipment from vendor Atlanta Fixture in place, plans for the meat market’s grand opening began.

A New Beginning
kKing’s Meat Market opened in Jonesboro, Ga., just a quick drive from Atlanta. Today, the business is thriving, with some of the best-selling items being chicken wings and drumsticks, spare ribs and T-bone steak. Kim and Cho equate the experience to the American Dream.

“As immigrants, my parents worked hard to achieve what they desired,” said Stephanie Kim, daughter of Kim and Cho. “There were many opportunities along the way that made this dream of a small business a reality for them.”

A “New School” Vision for Equipment Financing
The success of King’s Meat Market would not have been possible without a “new school” approach to equipment finance, which focuses on creating a positive finance experience for the borrower while managing risk. Old school lending focuses on the lender and risk management, and tends to maintain outdated processes with paperwork and policies. This unfortunately includes an unfounded belief that English as a second language (ESL) and English as a foreign language (EFL) entrepreneurs are high risk, or worse, not worthy of funding.

“A good lender starts with the question: Does this loan or lease make sense for this business?” said Vernon Tirey, CEO and president of LeaseQ. “For Kings Meat Market, the answer was yes. Though a startup, the owner operator was highly experienced in ethnic meat retail, had run successful operations for other businesses, had good credit and presented a believable business plan. Financial Pacific made sure English proficiency didn’t stand in the way.”

“Financial Pacific is a hero,” Tirey continued. “As one of the emerging champions for a new, more flexible borrower-driven financing experience, they use automation to improve risk scoring, speed up and simplify the financing process and leverage new approaches like real-time translation services to help the borrower. Because of them and others like them, lenders and small business owners, and local economies benefit in a big way.”

About Financial Pacific Leasing, Inc.
Financial Pacific Leasing, Inc is a specialty finance lender headquartered in Federal Way, Wash. The company has been an important source of capital for small businesses throughout the United States for over 40 years. Financial Pacific’s programs support long term, third party originators in meeting the equipment acquisition needs of their clients. Financial Pacific Leasing, Inc. is a subsidiary of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative use of technology, and distinctive banking solutions. For more information about Financial Pacific, please visit www.finpac.com.